Ex directors of dissolved freehold Co. continuing as nothing has happend.

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    Ex directors of dissolved freehold Co. continuing as nothing has happend.

    I have found out that the freeholder company of my flat was dissolved, and that the freehold is in the hand of Treasury Solicitors for more than 7 years. The Ex. directors of the dissolved company have been continuing to act as as if nothing has happened and claimed as if they are the freeholders. There are three flats in the building. The Ex directors have arranged insurance and managed the building. They even negotiated extensions to the building and dealt with the planners etc. Is this legal?
    I know that we can apply to treasury Sol. to buy the freehold reversion what is our right in respect to the Ex directors actions up to now? The price and marketability of the flats are effected. What happens if we have an accident is the insurance valid. Are we entitled to damages for deception and defraud? Thanks

    #2
    You need to speak to them. Bear in mind if tbey are incompetent enough to let the company fold then they may not even be aware they are doing wrong.

    Comment


      #3
      They probably dissolved the company to take away their liability.
      Directors who do not follow the Companies Act or Rics 80 page service charge book, or follow health and safety, can be fined and in bad cases, can be imprisoned.

      "Lets disolve, then we wont be sued"
      Great situation where they can do what they like, as there is no freeholder.

      They have had extentions done, which would be illegal without the freeholders consent, and money forwarded to the freeholder fo taking land or whatever.
      But guess what: "No freeholder" - freeholder dissolved. Do what they like, and they did.

      Note, that you will not be able to sell your flat if there is no freeholder in place.

      You need to put your foot down, but it may be expensive, but directors are liable for past problems even if they are no longer Directors ( but usualy for serious crimes against the freehold / leaseholders )

      Comment


        #4
        Originally posted by ram View Post
        You need to put your foot down, but it may be expensive, but directors are liable for past problems even if they are no longer Directors ( but usualy for serious crimes against the freehold / leaseholders )
        A common problem (albeit not quite as flagrant as this)... but are there many good examples of Directors actually being held personally responsible for anything at all? It seems to me that majority Directors can do absolutely whatever they like in practice (steal, fail to manage) and bear (in practice) no personal risk whatsoever.

        Comment


          #5
          Thanks for your replies. I don't know how they ended up to loose the Company but they bought the freehold and a vacant flat then they set up the Co. and after a few years the Co. went dormant and did not show any income in the co. accounts. The Co. dissolved via compulsory strike-off. The directors who were known as the freeholders acted as if nothing has happened ad did not disclose that the company has dissolved and continued managing the building...etc. They obviously knew that they have no longer any right to the freehold, even though they had bought it and had a flat in the building. They answered all lessee queries and regarding lease and structural changes and planning changes.

          Comment


            #6
            Originally posted by AndrewDod View Post
            A common problem (albeit not quite as flagrant as this)... but are there many good examples of Directors actually being held personally responsible for anything at all? It seems to me that majority Directors can do absolutely whatever they like in practice (steal, fail to manage) and bear (in practice) no personal risk whatsoever.
            But to let the freehold company dissolve and the freehold revert for seven years and go on acting as the freeholder?? That has got to be culpable action for something on many levels?

            Guess the OP already knows the irony about the Treasury Solicitor and the six year limit. What happens after 7 years?

            Seems Crown has no obligation to act as freeholder or manage while the leases run down. I thought there would be a bowler hat/high-vis tabard somewhere in the chain PDQ.
            Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

            Comment


              #7
              ram,

              What I would like to know is if the Ex. directors should have disclosed the situation to the lessees? By continuing to act as nothing had happened they have been deceptive for the last seven years. They were like the deposed kings who didn't want to abdicate, so they hired and fired and collected taxes and took people to the gallows! How should we deal with them is the question?

              Comment


                #8
                They are not answering our emails but I have talked to a solicitor who says that we can buy the freehold from BV. I have asked about possibility of reinstating the company but as it has been dissolved for more than six years it is not an option.

                Comment


                  #9
                  HI, I'm just googling like you OP but this stuffs scares and fascinates me as a lessee.

                  The government Bona Vacantia division link is here:

                  https://www.gov.uk/guidance/apply-to...reversion-bvc4

                  Haven't read everything but the basics seem clear. It will cost market value just as first time and the government (no surprise) want full value even for a free gift from their point of view.

                  You really need to be sure you have volunteer directors willing to do it right this time, and have participation agreements locked down before you even start. Having experienced directors in RTM nothing surprises me.

                  Strikes me them old directors aren't. Check Companies House. If the company don't exist then neither do they. ignore them unless suing. They are in the same boat as you otherwise - lessees adrift in a legal limbo.
                  Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

                  Comment


                    #10
                    Got locked out and couldn't edit above!

                    Might be a relatively painless deal if the old freehold company gave its shareholders 999 year leases and these have been inherited by new owners so nobody under 80 years as then the BV buy back premium would be x15 total annual ground rent (peppercorn right?). Plus fees, blah blah.
                    Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

                    Comment


                      #11
                      Norooz,

                      As far as I am aware ALL leaseholders need to be onboard to buy the freehold back from the crown. Assuming the 'director' of the ex company still owns a leasehold this means negotiation ahead as opposed to retributive action.

                      Comment


                        #12
                        Thanks for your comment, I have been told that we need to send a letter to all of the leaseholders and say that the Treasury Solicitors may be prepared to sell the freehold to the leaseholders who are interested. Those who decline will be taken off the list of interested party. What I would like to know is what is the notice period for the leaseholders to accept or decline the invitation? Can the Ex. directors who are also leaseholders drag their feet and continue their behaviour? How can we be compensated for all the time and money that was lost due to their deception?

                        Comment


                          #13
                          Questions asked.
                          are there many good examples of Directors actually being held personally responsible for anything at all ?

                          Yes, scores of directors are dismissed ( by the Government ) every year, but it's usualy for none payment of V.A.T. or income tax, and very few because of their behaviour in this instance.
                          Its always, "How much money did you lose ?" and if you lost none, then /Directors are free to run wild.

                          Suggest internet search, as I have done in the past, but don't have time this or next week to find all the links.
                          When searching ( removing directors ) take care as some sites relate only to Commercial businesses and private companies ( PLC )

                          if the Ex. directors should have disclosed the situation to the lessees? By continuing to act as nothing had happened they have been deceptive for the last seven years. How should we deal with them is the question?

                          Again, internet search ( allow a week, as much info out there ).
                          Get clued up first before you see a solicitor, but you MUST ensure they are Landlord and tenant ( residential ) orientated, and very few local firms are experienced in these matters.

                          You can go for a derivitive action, but there are no Directors for 6 / 7 years, so you may not win there ( and expensive )

                          How to deal ?
                          You state that they have no authority to run the place, allthough someone has to, and they have done something at least, and thank them, but * * * *
                          You have to get the freehold back, refuse to let the privious people who let it slide and added extensions etc without paying for any land they took.
                          Unfortunately, they can dig their heels in, but without them you may not be able to buy the freehold, but pre-pepare your application to appoint a manager to aply to the F.T.T. as that's the only way I see that you may have Directors you don't want ( because of buying freehold ) but an FTT Manager ( basicly appointed by the Government ) oversees the place and the Directors have no input whatsoever, cannot do anything, apart from meetings to discuss.

                          A Manager can take on board the previous acts of Directors / leaseholders and bring cases against them for unlawful alterations ( Planing permission does not overrule the lease ) or whatever.

                          A manager will have to have insurance, and have available, lets say, £ 10000 in reserve for FTT and court costs ( which he will get back ) and for urgent repairs.
                          If the lease states to pay service charges in advance, then that's a load off the Manager in that case.

                          They are not answering our emails
                          You just write, always write, and always in this instance, write with a copy of any emails ( just copy and paste into a letter. )
                          If they don't reply, then you have hard copies and proof they got the letters, for future action by you or the manager. ( but get freehold back first, even having directors you don't want- ) but you can scream and shout that no way will the ones that got you into this state, cannot be a director.
                          You and a friend can be a Director ( you need a minimum of 2 Directors ). Does not have to be a leaseholder unless the lease says so.

                          What I would like to know is what is the notice period for the leaseholders to accept or decline the invitation?
                          I think it's 6 months, but again, check internet.

                          Can the Ex. directors who are also leaseholders drag their feet and continue their behaviour?
                          Yes they can, and expect them too, as their little Kingdom is about to fall, and you will now be "scum" in their eyes.

                          How can we be compensated for all the time and money that was lost due to their deception?
                          Again internet, but a good solicitor ( a real good one ) may be able to put forward options, and again, if it all boils down to "How much money did you lose" then you may not be sucessful.
                          U.K. is rife with Money compensation, and if your life was made unbareable, but you lost no money, then that seems to be o.k. if you lost no "substantial" money"

                          Much searching and solicitors advice on your part for this, as it's such a mess for anyone to give to a sheet of paper with definitve list of what to do.

                          You know the leaseholders, you know how many, etc etc ( did you state how many ? ) and contact solicitors, but don't rely on them, get your own facts from the net.

                          Comment


                            #14
                            As there is only 3 flats.

                            Bear in mind small blocks with less than 4 joint freeholders can be held directly on the title register with no company required. (A deed of trust is often advised, and has both pros and cons).

                            If you bought from the treasury in such a manner then this would negate the chances of a company fold in future. It would encourage decisions by negotiating as opposed to directors making decisions, and there would be no worrying about company law.

                            Comment


                              #15
                              Legal Opinion on Freehold Transfer

                              *****We would like to start the process for purchasing the freehold and to do that we would like to send a standard letter to the other lessees and ask them if they would like to participate jointly in the freehold transfer, or if they wish to decline to participate, to confirm by filling a standard “Decline Form” in writing in a set time frame. I would like to know opinion of a solicitor who has the experience in this field and what is their normal fees. Thanks
                              Last edited by Norooz; 21-01-2016, 16:04 PM. Reason: error

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